United Healthcare 2014 Annual Report Download - page 59

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Contingent Liabilities
Because of the nature of our businesses, we are routinely involved in various disputes, legal proceedings and
governmental audits and investigations. We record liabilities for our estimates of the probable costs resulting
from these matters where appropriate. Our estimates are developed in consultation with legal counsel, if
appropriate, and are based upon an analysis of potential results, assuming a combination of litigation and
settlement strategies and considering our insurance coverage, if any, for such matters.
Estimates of costs resulting from legal and regulatory matters are inherently difficult to predict, particularly
where the matters: involve indeterminate claims for monetary damages or may involve fines, penalties or
punitive damages; present novel legal theories or represent a shift in regulatory policy; involve a large number of
claimants or regulatory bodies; are in the early stages of the proceedings; or could result in a change in business
practices. Accordingly, in many cases, we are unable to estimate the losses or ranges of losses for those matters
where there is a reasonable possibility or it is probable that a loss may be incurred. Similarly, the assessment of
the likelihood of assertion of unasserted claims involves significant judgment.
Given this inherent uncertainty, it is possible that future results of operations for any particular quarterly or
annual period could be materially affected by changes in our estimates or assumptions. We evaluate our related
disclosures in each reporting period. See Note 12 of Notes to the Consolidated Financial Statements included in
Part II, Item 8, “Financial Statements” for a discussion of specific legal proceedings including an assessment of
whether a reasonable estimate of the losses or range of loss could be determined.
LEGAL MATTERS
A description of our legal proceedings is presented in Note 12 of Notes to the Consolidated Financial Statements
included in Part II, Item 8, “Financial Statements.”
CONCENTRATIONS OF CREDIT RISK
Investments in financial instruments such as marketable securities and accounts receivable may subject us to
concentrations of credit risk. Our investments in marketable securities are managed under an investment policy
authorized by our Board of Directors. This policy limits the amounts that may be invested in any one issuer and
generally limits our investments to U.S. government and agency securities, state and municipal securities and
corporate debt obligations that are investment grade. Concentrations of credit risk with respect to accounts
receivable are limited due to the large number of employer groups and other customers that constitute our client
base. As of December 31, 2014, we had an aggregate $1.8 billion reinsurance receivable resulting from the sale
of our Golden Rule Financial Corporation life and annuity business in 2005. We regularly evaluate the financial
condition of the reinsurer and record the reinsurance receivable only to the extent that the amounts are deemed
probable of recovery. Currently, the reinsurer is rated by A.M. Best as “A+.” As of December 31, 2014, there
were no other significant concentrations of credit risk.
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